Best’s News & Research Service - December 11, 2019 01:27 PM (EST)
AM Best Affirms Credit Ratings of Chubb Perú S.A. Compañía de Seguros y Reaseguros
- December 11, 2019 01:27 PM (EST)
Mexico City //BestWire// - AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a+” of Chubb Perú S.A. Compañía de Seguros y Reaseguros (Chubb Perú) (Lima, Perú). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect Chubb Perú’s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).
Chubb Perú initiated operations in 1998 as Altas Cumbres; in 2007, it was acquired by ACE Group and branded ACE Seguros S.A., until 2016, when its name was changed to Chubb Seguros Perú S.A. following the acquisition of The Chubb Corporation by ACE Limited.
The company has a diversified book of business, distributed through a mix of traditional and massive channels, such as large regional retailers and banks. Currently, its business portfolio is composed of 52% property/casualty, 32% life, and 16% accident and health. As of September 2019, Chubb Perú is the tenth-largest insurance operation in the country, with a market share of 1.7%.
AM Best considers Chubb Perú’s balance sheet strength as very strong, as the company has a defined risk appetite that limits its exposures and protects its solid capital base through adequate investment, reinsurance and underwriting principles. Additionally, the company has a comprehensive reinsurance program with its affiliate, Chubb Tempest Reinsurance Ltd. In 2018, the implementation of the new methodology for the calculation of unearned premium reserve took place resulting in an excess of reserve of PEN5.7 million reclassified to accumulated results, reinforcing the capital position of the company.
The 2018 year-end results reflect the better performance of Chubb Perú in comparison with 2017, when the company faced several claim events. Underwriting performance remains adequate, with a combined ratio of 77.9%; while the company’s upward trend in net premium growth has materialized in an upward trend in results for 2018, AM Best expects to see further continuation of this trend in years to come. September 2019 results reflected a positive trend in net income, driven by improvements in the expense ratio.
The company benefits from its integration into the group, gaining operational advantage through the same systems, procedures and ERM practices. The group has demonstrated its support to Chubb Perú by providing a comprehensive reinsurance program with its affiliate and actively overlooking its strategy.
Positive rating actions could take place in the medium term if the company is able to reach its desired results, reflecting in a capital base that is able to sustain a balance sheet assessment of strongest. A sharp deterioration in operating performance or a significant weakening of its risk-adjusted capitalization could lead to negative rating actions. The ratings could be downgraded if AM Best determines that Chubb Peru’s strategic importance to its group has diminished.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of AM Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Key insurance criteria reports utilized:
- Evaluating Country Risk (Version Oct. 13, 2017)
- Understanding Universal BCAR (Version May 23, 2019)
- Catastrophe Analysis in A.M. Best Ratings (Version Oct. 13, 2017)
- Available Capital & Holding Company Analysis (Version Oct. 13, 2017)
View a general description of the policies and procedures used to determine credit ratings. For information on the meaning of ratings, structure, voting and the committee process for determining the ratings and monitoring activities, please refer to Understanding Best’s Credit Ratings.
• Previous Rating Date: Nov. 14, 2019
• Date Range of Financial Data Used: Dec. 31, 2014-Sept. 30, 2019
This press release relates to rating(s) that have been published on AM Best’s website. For additional rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page.
AM Best does not validate or certify the information provided by the client in order to issue a credit rating.
While the information obtained from the material source(s) is believed to be reliable, its accuracy is not guaranteed. AM Best does not audit the company’s financial records or statements, or otherwise independently verify the accuracy and reliability of the information; therefore, AM Best cannot attest as to the accuracy of the information provided.
AM Best’s credit ratings are independent and objective opinions, not statements of fact. AM Best is not an Investment Advisor, does not offer investment advice of any kind, nor does the company or its Ratings Analysts offer any form of structuring or financial advice. AM Best’s credit opinions are not recommendations to buy, sell or hold securities, or to make any other investment decisions. View our entire notice for complete details.
AM Best receives compensation for interactive rating services provided to organizations that it rates. AM Best may also receive compensation from rated entities for non-rating related services or products offered by AM Best. AM Best does not offer consulting or advisory services. For more information regarding AM Best’s rating process, including handling of confidential (non-public) information, independence, and avoidance of conflicts of interest, please read the AM Best Code of Conduct. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
AM Best is a global credit rating agency, news publisher and data provider specializing in the insurance industry. The company does business in more than 100 countries. Headquartered in Oldwick, NJ, AM Best has offices in cities around the world, including London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.